02/05/2024
Warren Mills
Winter 2024

Welcome to the 2024 Winter Edition of The Rare Coin Enthusiast

This Month's Featured Articles
Warren's recap of the 2024 F.U.N. show
P.V.C. contamination warning
Commercial grading a sham and a shame
Dollar dumping
Client question

Welcome to the 2024 New Year Rare Coin Enthusiast.
2024 F.U. N. show recap
By Warren Mills

I apologize for the delay between our e-letters. Last year was very hectic with many collections coming in for review and liquidation. Many collectors are hole or slot buyers wanting to fill their collections with anything that’s certified. Others however, are concerned with maintaining top quality for grade. When we examine these types of collections it is much more involved. Crossing coins over to other service holders may come into play as well as regrading and submissions to CAC. It takes a tremendous amount of time, but the added value to our collectors makes it all worth it. We will continue to go the extra mile where we can to help our clients with the fairest values possible. I also want to thank Coin World for naming Rare Coins of New Hampshire one of the most influential dealers in the world for 2024!

If this show is truly a harbinger for the year to come, hold onto your hat. We could be in for a great year. The coolest part was that we had collectors from their teens to their 80’s buying great coins. It was shocking to see young kids that know how to rotate and grade coins with wads of cash to pay for them. Also, we had a number of $20 gold pieces in our inventory in price ranges of $3,000 to $20,000 each. They all sold in the first hour. The focus appears to be on a combination of quality and eye-appeal. Very few people quibbled about price most of the collectors we encountered said this is the type of quality I look for. Then they have come to the right place.

P.V.C. Contamination Warning

By Warren

A rough trend that I have noticed in older collections that have been slabbed and off of the market for a long time is poly vinyl chloride leaves (P.V.C.) residue buildup and dip residue splotchy toning. I don’t know how collectors don’t see the grey to green discoloration that poly vinyl chloride leaves on the surface of the coin from storage in older soft flips. Too many collectors just look at the insert tag for the grade of the coin. Keep in mind, C.A.C will not sticker a coin with P.V.C. and C.A.C.G. will not straight up grade a coin contaminated by P.V.C. P.V.C. will also continue to build on the surface and cloud the coin over. Learn to recognize the signs of P.V.C. contamination. Many times, P.V.C. takes years to manifest itself on a coin’s surface. Older C.A.C. verified pieces are also subject to this scourge so be careful.

Commercial Grading a Sham and a Shame

Call it what you want, the words are interchangeable, commercial or market grading. Those of us with snow on the roof or a shine on the top of our heads call it “grade-flation.” Commercial grading relaxes strict grading standards to the point that it increases the supply so much that prices drop and continue to slide downward. A coin may have the look of an XF and you may grade it XF without punishing the coin for a wipe, nick, cleaning or scratches, however, that coin should be punished. Those of use that grew up buying wholesome original coins for the grade are appalled at the over-graded pieces that distort populations to make great coins look common. Apply the same process to mint state coins. A lustrous nice AU-58 with obvious rub ends up in a MS-61 or MS-62 holder. A nice MS-63 with noticeable naked eye abrasion ends up in a MS-64 or MS-64+ holder. Hence market grading.

You may not like it, but in my opinion C.A.C. has the potential to save the coin market by delivering to the knowledgeable collector the strict standards that they deserve not only to preserve value but hopefully to increase in value. I’d love to know how many collectors are submitting coins for cross-over to C.A.C.G. and will even take a lower grade based on true technical merit! I’m not saying that all C.A.C. or C.A.C.G. coins are fine, far from it and I will state examples later, but at least these services give the collector a better-quality product that may actually increase in value. Distorted high populations only lead to lower prices.

Even though I believe in C.A.C. and C.A.C.G., I had to decline becoming a shareholder. When John contacted me and I said I thought it would be a conflict of interest, his words to me were “I knew you would say that.” I understand all of the affluent dealers and collectors that want to take a bite of the apple. Many could care less about coins or collectors but they hope to be in on the next money-making opportunity. To me, it’s not right. I never want to lose my objectivity to help the end buyer of a coin. I think I still would be able to be objective, but my opinion could be looked at as tainted as an owner.

Dollar Dumping

I woke up to the news a few weeks ago that a Japanese steel company bought U.S. Steel for almost 16 billion dollars, in cash! My thoughts were oh oh, here it comes. Twenty percent of the world countries are now settling debt with currencies other than the U.S. dollar. Ten new countries applied to join B.R.I.C.S. Turkey was turned down by the G-7 and immediately applied to B.R.I.C.S. Inflation and money creation out of thin air are negatively impacting the U.S. dollar. The debt load is insane and growing. China continues each year to but the most gold and who knows how much they bought that is undisclosed. I think we need to start facing reality. The U.S. dollar’s reserve currency status will be jeopardized in the future. Most of the young numismatists that I was so proud of for knowing how to grade coins and lined up at the F.U.N. show to look at our coins paid cash. I’d say that over 70% of our sales were cash. Usually, it’s just 20%. Young and old collectors were dumping cash!

Please don’t feel this is an all-out recommendation to buy gold and silver with both hands. But at least consider a price average strategy. I’ve been recommending a systematic approach to buying bullion for a while now. Why did every nice C.A.C. $20 gold piece we had sell instantly at the show? Gold was up 15% last year. If there is an economic event for the U.S. in 2024, gold will also drop early on because it may be the only liquid asset people have. However long-term, it could rocket out of sight. Consider setting up a protection plan while you can, think of it as portfolio insurance. Better to be a year early than a second late. An election year may give us more time to act.

Client Question

The question I get asked the most is what is my feedback on how C.A.C.G. is grading the coins that are submitted to them.

First, the credibility of John Albanese, Ron Drzewucki and John Butler is beyond reproach. They are true consummate professionals that want the best for the collector. And to maintain a strict grading standard. However, they still must find that sweet spot that will allow them to not be so strict that dealers and collectors stop submitting coins to them. That’s a hard line to draw. My impression is that C.A.C.G. and C.A.C. offer a superior service. The sticker service is very strict now to the point where it may not make sense. A nice coin will always be a nice coin. I say this because in some cases where I think C.A.C. is wrong, I had to cross-over to a different service or re-holder a coin to get it to C.A.C. We are all human and, in my opinion, it is better to be to strict than to loose.

Early on with C.A.C., I had a scarcer date original Seated quarter graded MS-65. A client gave it to me to submit to C.A.C. I sent it in the C.A.C. after I told him it would gold sticker. Of course, it only green stickered. The client was upset. I put my money where my mouth was and bought it as an MS-66. I sent it to P.C.G.S. and it graded MS-66. Back to C.A.C., now with a different serial number and it received a green sticker. I priced it and since type has been out of favor, it sat in my inventory. At a large show, a well-known dealer paid my price for it. He resubmitted it and it graded MS-67. Back to C.A.C it went and it green stickered. We are all human but a nice coin is always a nice coin.

Many dealers don’t know or care if a coin deserves the grade or sticker, if it’s C.A.C. or C.A.C.G. they just put a big price on it. Sadly, many collectors don’t understand how to ascertain value. To me, C.A.C.G. is grading rarer expensive coins better than more common issues. I saw a dealer that has a double row box of 50 or so classic commemoratives. He showed me the box and they were all C.A.C.G. I looked at them to pick out a few I may like. I didn’t pick out one. He asked me what I thought. I couldn’t be diplomatic. I said every coin to me was a half point to a full point over-graded. I apologized but it had to be said. He said they were not his coins and he was selling them for someone but he agreed with me. Every coin was either unattractive or washed out. I understand that because the coins were inexpensive that C.A.C.G. may have loosened up. Those 50 coins may have been leftovers from a 500-coin submission, I don’t know and maybe the nicer coins sold. However, if the mission of C.A.C. and C.A.C.G. is to deliver a strict grade and solid value coin it needs to apply to expensive and inexpensive pieces. Those commemoratives truly shocked me and saddened me.

Eventually, they’ll figure it out and find the sweet spot but the important lesson in all coin purchases remains the same. But the coins, not the holder. If shareholders don’t put pressure on the three main players in C.A.C.G. to cave in to get more submissions, it should work. If, however the call of making money at any cost is to loud, maybe John will go back to the stricter service.

If you have any questions, you’d like me to address privately or in the next Enthusiast, please let me know.
Thank you,
Warren

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